Is this is the last great escape in the financial crisis?

There will probably be other bailouts, but few will be able to top the government’s audacious rescue of Citigroup. And despite the desperate nature of the weekend deal, the stock market seems to like it.

The Treasury and the Federal Deposit Insurance Corp. will backstop some $306 billion in loans and securities, including mortgage-backed securities. Citi will absorb any losses up to $29 billion, but the U.S. government is on the hook for 90 percent of anything more than that. And that’s in addition to the government's portfolio of toxic debt from Bear Stearns, A.I.G., and Fannie and Freddie.

The asset guarantee will free up $16 billion in capital, Citi said.

The Treasury will also invest $20 billion into the company under the TARP. Citi had already received $25 billion from the TARP.

Citi will issue the government $27 billion in preferred stock that pays an 8 percent dividend and it will issue warrants equivalent to a 4.7 percent stake in the company. The warrants have a strike price of $10.61 (Citi closed on Friday at $3.77)

Under the terms of the deal, the government must approve any executive-compensation plan, and the bank is prohibited from paying a common stock dividend of more than a penny a share for the next three years without the government’s consent. But there will be no management changes.

Robert Reich, the former Labor secretary, is not impressed, saying:

"This is not a particularly good deal for American taxpayers, but it is a marvelous deal for Citi. In return for all the cash and guarantees they are giving away, taxpayers will get only $27 billion of preferred shares paying an 8 percent dividend. No other strings are attached. The senior executives of Citi, including those who have served at the highest levels in the US government, have done their jobs exceedingly well. The American public, including the media, have not the slightest clue what just happened."

The weekend intervention came after rumors increased about Citi and its stock price plunged 60 percent in just a few days.

In rescuing Citi, the government finally acknowledged the elephant that has been in the room ever since the frenzied weeks of September, when Lehman Brothers collapsed, American International Group was bailed out, Washington Mutual and Wachovia were sold, and Morgan Stanley and Goldman Sachs became bank holding companies. Citi was vulnerable because of huge amounts of toxic mortgage debt on its books, but it was not seen as being in danger because of its size. “Too big to fail” gave a false sense of safety.

The announcements this week that the bank was still trying to shrink—suggesting that like A.I.G., it could not find buyers for its assets—and that it would be buying back some $17 billion in investments from its structured-investment vehicles formed a powerful wake-up call: Citi could not keep stumbling day after day, quarter after quarter.

With the Citi bailout, the government may have finally settled on a template for financial rescues: one that involves the original design of TARP, providing protection for —if not outright purchase of—troubled securities as well as cash infusions.